It seems that the argument I hear from a lot of leftist statists is that free markets would lead inevitably to feudalism where a small group of individuals own all the land and wealth. This is why we need a State: a small group of individuals who ensure that the masses are protected from the ravages of free markets. The State is valid because of the social contract, which is valid only if the State owns all the land.

This could probably be refined down to one of Eddy's succinct circular arguments, but I'm not quite sure how.

The problem, I think, is that they don't view the State as an oligarchy because of the delusion of democracy. They think they have some sort of input into the State which is why it's better than some "private" individuals owning everything. It's the myth of democracy and the myth of members of government being more moral than "private" individuals.

I actually see this as only a possibility with crony capitalism. As someone buys up more land, the costs to protect it from fire/theft/invasion/flood/etc increase. With the current "capitalism" (crony capitalism) that people see, those costs are eaten up by the state.

In real capitalism if people don't like that your buying up all the land, they can stop dealing with you and you will run out of money quickly. That is quite different from crony capitalism where many people are becoming incredibly rich through government contracts and political influence which doesn't go away, despite nearly universal hatred of congress.

There is also the issue of people being unwilling to sell. With crony capitalism, it has been common practice to force people off their land and the government gives it to a company that they believe will bring in more tax revenue. That can't happen with real capitalism.

The ability to choose who to trade with makes all the difference in the world.

I actually see this as only a possibility with crony capitalism. As someone buys up more land, the costs to protect it from fire/theft/invasion/flood/etc increase. With the current "capitalism" (crony capitalism) that people see, those costs are eaten up by the state.

In real capitalism if people don't like that your buying up all the land, they can stop dealing with you and you will run out of money quickly. That is quite different from crony capitalism where many people are becoming incredibly rich through government contracts and political influence which doesn't go away, despite nearly universal hatred of congress.

There is also the issue of people being unwilling to sell. With crony capitalism, it has been common practice to force people off their land and the government gives it to a company that they believe will bring in more tax revenue. That can't happen with real capitalism.

The ability to choose who to trade with makes all the difference in the world.

Good analysis and I completely agree. My point was that even accepting their arguments it becomes a circular regression. I probably didn't do a very good job of demonstrating that. I'll work on it.